What's the difference between key covers?

Understanding each type of business insurance

With so many covers on offer, it can be confusing to understand the difference between them and what claims each of them covers.

If you’re not covered for what you thought you were, and a claim was made against you, it could end up costing you money that you might not have budgeted for.

Learning the ins and outs of each cover will ensure you know exactly what you’re buying, so you can be confident that you’re covered for the things you need.

Here, you’ll learn the differences between the key covers out there, including public liability, professional indemnity, employers liability and product liability insurance.

What's the difference between public liability and professional indemnity?

Public liability and professional indemnity both cover compensation claims. The difference between public liability and professional indemnity insurance is that public liability covers claims made by members of the public for accidental injury or property damage caused by you or your employees. Professional indemnity, however, covers claims made by clients for mistakes or negligence in your work.

Professional indemnity is mostly relevant to those who offer services, advice or consultancy.

An example of a public liability claim would be: a client slips on a wet floor in your office and wants to claim compensation.

A professional indemnity insurance claim example is: a client loses money because of a mistake you made on a report that you were hired to create.

To learn more, check out our guide on the difference between public liability and professional indemnity insurance.

The difference between public liability and employers liability insurance

Both of these types of insurance cover claims of accidental injury and property damage, but the difference between these two covers lies in who is making the claim.

Public liability insurance covers claims made against you by a third party, meaning any member of the public, such as a client, customer, courier or complete stranger.

Employers liability insurance covers injury claims made against you by an employee as a result of your business.

Another key difference is that employers liability is a legal requirement in the UK for any business that has employees, while public liability is not a legal requirement. Despite this, many businesses consider public liability a necessity to protect them from large compensation costs and legal fees if a claim was made against them.

An example of an employee liability claim is: an employee is walking back to their desk and trips over a loose piece of carpet, breaking their arm.

A public liability claim example would be: a customer is walking through your shop and trips on a loose wire that’s on the floor, breaking their arm.

To learn more, check out our guide on the difference between public liability and employers liability insurance.

What’s the difference between public and product liability insurance?

Both product liability and public liability insurance covers claims of injury and property damage, but public liability covers claims relating to your business activities and services, including the actions of you and your employees, while product liability insurance covers claims relating to any products you sell, supply or manufacture.

An example of a public liability claim would be: an employee of your company is giving a presentation and accidentally spills coffee over the client’s laptop and their arm, damaging their property and injuring them.

An example of a product liability claim would be: a hairdryer that you sell from your salon is faulty and causes a small fire in a customer’s house, damaging their property and injuring them.

To learn more, check out our guide on the difference between public liability and product liability insurance.

Find more information

Our insurance 101 guides break down what each type of cover is, what they cover and the types of businesses that may need them in more detail.

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